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January 02, 2005

Facing Facts

In the article there was a quote, "By insulating themselves in the short run from the problems of society, the elite merely bought themselves the privilege of being among the last to starve."

My interest today is how the same concept of hiding from reality applies to corporations. By nature most corporations gravitate towards easy solutions. Most easy solutions are easy to fit within current corporate frameworks and guidance. That is why they are easy. However, they often ignore pesky facts that would require serious plans for substantial real change. Inertia is the standard state of most corporations. Reorganizations while impressive on paper, can often be just rearranging the deck chairs on the Titantic.

This is especially true in American corporations which demand
results each quarter and have little patience for long term challenges
or solutions. I have watched many potentially good ideas almost get to
success only to be derailed by corporate impatience.

Perhaps what separates a good corporation from a great corporation
is the ability to really understand the harsh truth of the present
while executing long term plans for the future.

Many corporations have a no "bad news" philosophy which often is
really just another way of saying "tell me what I want to hear" not
what is really happening. Sales may not be growing by as much as the
competition, but it is much easier to hide the news under some
carefully created "good trends" than it is to address the fundamental
problems.

Managers who tell it like it is are often challenged and labeled as
complainers. Many corporations are so enthralled with PowerPoint or
Keynote presentations that they become the reality. Any manager knows
that you can stick anything in a presentation. The challenge becomes
separating the fact from the reality in presentations.

One of my management philosophies was to keep a web site of all
presentations made either by me, my managers, my employees, or bosses.
If an employee puts up the same nice looking slide year after year with
little real progress, a good manager should be able to catch it. A
history of presentations generally makes for real progress and a
tendency to focus on the truth.

The bigger challenge happens to be executives who think they are
making progress without really turning in results. They pat themselves
on the back, line their bank accounts with profits from options, but
often really refuse to grapple with fundamental issues.

A company facing steadily declining market share in its core
products while its executives keep maintaining that it is successful is
likely ignoring the rank and file employees dealing with the core
product. While a wildly successful "fad product" may hide the truth,
as employees tasked with selling the core product starve, the
executives are only creating a situation where they will be the last to
starve.

Of course if they are members of the buddy society that I have
talked about in other posts, they probably have their rears covered and
their bank accounts full. The only real losers will be the stock
holders who assumed there was competent management and the employees
who likely were unable to share in the good times enough to make up for
the bad times.

American corporations may well be the dinosaurs of this century.
The fantasy land that many corporations inhabit is likely going to be
challenged as never before in the next twenty-five years.

Fortunately for our economy, much more nimble small businesses which thrive on reality may save the day.